Just wanted to give you a quick Link to the offline-Blogging Editor I am testing out at the Moment. It's called "Quamana" and it's doing a fine job so far. As you can see Image upload is working nicely (using wordress integrated features and not FTP). It's available over at http://www.qumana.com/ for OSX and Windows. They've got some advertising programm going as well which is neatly integrated into the client (but as I'd prefer adsense)